Political groups court young voters with pledges to ease virtual asset investment rules
Both the ruling and opposition parties are considering virtual assets as a strategy to appeal to young voters ahead of the April 10 general elections. The main opposition Democratic Party of Korea (DPK) took the initiative by promising to permit investments in and trading of Bitcoin exchange-traded funds (ETFs).
The DPK unveiled a series of policies concerning virtual assets, Wednesday, centered around the theme of “Sound Market, Safe Investment, and Various Business Opportunities.” These policies include allowing investments in spot Bitcoin ETFs listed on international stock markets and creating opportunities for domestic asset management firms to develop and list their own Bitcoin ETF products on the exchange.
The DPK said incorporating products linked to virtual assets into the regulatory framework aligns with global trends.
“The digital asset ecosystem is the essential infrastructure for realizing a new digital economy,” Rep. Lee Kai-ho, who leads the DPK’s policy planning committee, said at the National Assembly. “At this critical juncture, it’s important to address regulatory gaps to align with global trends and to lay the groundwork for a sustainable ecosystem.”
In January, financial authorities banned the purchase and brokerage of Bitcoin ETFs in Korea, determining that they conflict with the current Capital Markets Act. With Bitcoin ETFs recording a total transaction volume of 6 trillion won ($4.4 billion) in the U.S. stock market on their first day alone, domestic retail investors have shown huge disappointment.
For the approval, the DPK intends to first consult with the financial authorities. Should the resistance from regulatory bodies persist, they aim to revise the Capital Markets Act, thereby allowing the trading of Bitcoin ETFs.
In addition to these measures, the DPK’s policy package addressed several crucial issues advocated by market insiders, such as facilitating the involvement of institutional investors in the virtual asset market. Moreover, the investment deduction cap for virtual assets is slated to rise to 50 million won from the current 2.5 million won.
The party’s move is seen as an attempt to attract support from voters in their 20s to 40s, a group known for its significant involvement with virtual assets.
The ruling People Power Party (PPP), in cooperation with financial authorities, is also adopting a positive stance on improving regulations related to virtual assets. The PPP is reportedly considering policies similar to those of the DPK, including the approval of Bitcoin ETFs and the participation of institutional investors. It intends to announce the details of its pledges within this week.
“Most of the proposed bills focus on investments. Yet the truth is only a small segment of the population will be affected by the policies under consideration when investing in virtual assets,” said Hong Ki-hoon, a professor at Hongik University’s College of Business. “There is also a need to examine policies that can protect the public from the threats posed by blockchain-based virtual assets and their technologies.”